Arkansas allows you take a subtraction for your retirement income for up to $6,000 on your state return. If you are filing as married filing jointly and your spouse receives retirement as well, you are both entitled to a $6,000 exemption on your Arkansas return for your retirement income.
The program will not automatically deduct this income, you will have to make a manual entry within the state section.
Where to enter?
- State Section
- Subtractions from Income
- Pension Exclusion
- Enter the amount for both the Gross Distribution and the Taxable amount
For your convenience, the federal amount of the retirement income is shown for you to refer to.
Note: you cannot claim both the retirement income exemption and "65 Special" Tax Credit on your Arkansas state return. You must decide to use one or the other.
See also Is my military pension/retirement income taxable to Arkansas?